The $12 Footlong

What does a typical meal cost today? Maybe $12 for a quick stop — or $15 if including a drink. Sit down somewhere nice, and you’ll owe closer to $20.

Now fast forward 30 years. The $12 lunch — once only $5 — is headed toward $30. This increase isn’t because the food or the experience became extraordinary, but because the value of money changed. What once felt routine quietly became expensive.

That’s inflation. Over long periods, it reshapes far more than people expect. And over a 30-year retirement, that quiet shift critically impacts your financial life.

We tend to think of inflation in small, annual terms — maybe 2–3% per year, or occasionally higher, like we saw after COVID. On the surface, those numbers don’t seem threatening. But inflation doesn’t operate in single years. At roughly 3%, prices double about every 24 years. Stretch that across a typical 30-year retirement, and the cost of living rises closer to 2.5 times today’s pricing.

Viewed through that lens, the implications become much more tangible, especially for those on the verge of retirement.

Consider housing in Colorado. The average apartment today rents for roughly $1,800 per month. Over the next 30 years, that same apartment’s rent could easily exceed $4,000. A home selling for $550,000 today may approach $1.3 million over that same period. The property itself hasn’t meaningfully changed, but the dollars required to own it certainly have.

The same pattern shows up in everyday expenses. A $3 loaf of bread becomes $7. A $12 movie ticket pushes toward $30. Gas at $3.50 per gallon trends to $8. A cell phone plan that costs $90 per month exceeds $200. And a $1,000 smartphone becomes a $2,500 purchase over time.

Then there are the small but memorable things. Subway’s famous $5 footlong, once advertised everywhere, quietly becomes a $12 lunch. It’s the same sandwich with a very different number on the receipt.

These changes don’t happen suddenly, which why inflation is so easy to ignore. It happens gradually, almost invisibly from year to year. But over decades, the math becomes staggering.

For those approaching retirement, this leads to an important topic.

Someone in their early 60s today isn’t just planning for the next five years. They’re likely planning for a 25- to 30-year retirement. Today’s prices will continue to change, and they won’t resemble what this person will pay later in their retirement.

Yet many financial decisions are made as though that reality won’t materialize.

Most investors define risk as volatility. They look at markets moving up and down and understandably feel uneasy. After decades of saving, their instinct is to protect what they’ve built. In their minds, stability becomes the priority.

The appeal of non-fluctuating investments is indeed strong, especially when compared to the markets’ uncertainty. But this definition of risk is incomplete. We believe the biggest risk isn’t fluctuation; it’s inflation.

For many retirees, the more meaningful risk isn’t short-term fluctuations in account value; it’s the long-term reliance on income that might not keep pace with rising costs. When income remains fixed and expenses go up, the gap between the two widens over time. At first, it’s barely noticeable. Later, it becomes restrictive.

This is what it means to “grow poor slowly.”

This doesn’t lead to running out of money in a dramatic, sudden way. The dollars are still there, but what those dollars can actually buy continues to decline. The lifestyle that income once supported becomes harder to maintain.

The goal, then, isn’t simply to preserve a balance, but to preserve purchasing power.

With that clarity, the role of your income changes. If inflation compounds over time, your income must do the same. Without that growth, even a well-funded plan can eventually bring strain.

This is why it’s critical to consider the type of assets you own. Some investments provide stability without flexibility. Others, particularly ownership in productive businesses, allow for adaptation. As these businesses grow, adjust prices, and expand over time, the income they generate can rise as well.

That rising income helps offset any steady increase in your cost of living. It doesn’t eliminate uncertainty or remove market fluctuations, but it aligns your financial plan with an ever-changing world.

There’s an important behavioral lesson here as well. The risks that feel most immediate aren’t always the ones that matter most. Market volatility is distracting in the short-term; it demands attention because it’s visible and emotional. Inflation works quietly in the background, without headlines or urgency, but with a far more persistent effect.

So next time you sit down for a simple meal, consider more than just today’s price. Reflect on what that same experience might cost decades from now.

Is your income designed to keep up with the life you want to live — not just today, but for the next 30 years?

Because in the end, successful investing isn’t just about avoiding short-term discomfort. It’s about maintaining your ability to live well over time, even as the cost of everything around you keeps rising.